Beacon Energy PLC has announced a proposed fundraise of approximately €3.0 million through a conditional placing to institutional and other investors, as well as a retail offer through PrimaryBid. The fundraise will involve the issuance of new ordinary shares at a price of 0.05 pence per share. The company has engaged Tennyson Securities Limited as the Bookrunner for this initiative.

The decision for the fundraise comes after operational issues encountered during the drilling of the SCHB-2(2.) well, which led to the invasion of drilling fluids near the wellbore, restricting flow rates. Despite efforts to address the issue, including a sand jetting operation and the installation of a rod pump, the company anticipates that sustained flow rates from the well would remain below expectations. Consequently, the company has decided to undertake a side-track operation to bypass the damaged reservoir.

The gross proceeds from the fundraise, combined with the company's existing unrestricted cash, will be used for drilling and completing the side track, payment of outstanding costs related to the SCHB-2(2.) well, and general working capital. The company's unaudited cash balance as of 16 February 2024 is approximately €1.2 million.

The company's CEO commented, "The decision to undertake a side-track operation is a necessary step to address the operational challenges encountered during the drilling of the SCHB-2(2.) well. We believe that this approach will help mitigate the impact of the damaged reservoir and contribute to our ongoing efforts to enhance production rates."

The fundraise is subject to the terms and conditions set out in the announcement, and further details regarding the PrimaryBid Offer are expected to be released shortly. The company aims to commence the side-track operation in the first half of April 2024.